Governance by Algorithms, Governance of Algorithms: Human-Machine Politics in Decentralised Autonomous Organisations (DAOs)

Abstract

This paper situates Decentralised Autonomous Organisations (DAOs) in organisational theory as an expression of ‘organising outside organisations’ through algorithmic governance. Digital networks, such as the internet, make organising outside of traditional organisational structures possible (Shirky, 2008). DAOs are an attempt at decentralised organisation towards independence from external political influence. DAOs aim for self-governance using algorithms grounded in public blockchain technology, ‘smart’ contracts, and public key cryptography in complement to the traditional rule of law to enforce behaviours. As a relatively recent phenomenon, DAOs remain under-theorised in the field of organisational studies. This paper locates DAOs as organisations in relation to the ‘organisational elements’ proposed by Ahrne and Brunsson (2011) to respond to the research question, ‘can algorithms, as a centralising process, be governed in a decentralised manner?’. I employ qualitative, digital ethnographic methods to trace the relations between human and non-human actors in decentralised networks to investigate algorithmic governance in the case of a DAO called “Gitcoin”. DAO constituents are engaged in both the governance of algorithms, and governance by algorithms. I argue that algorithmic governance in DAOs constitutes a novel form of ‘machine politics’ that elevates algorithms to the position of new political actors who shape and determine how humans behave as well as organisational outcomes, while simultaneously needing to draw on the organisational structure to govern them. This piece contributes to a research agenda on the social implications of algorithmic governance and decentralised modes of organising.